I want to build a menu with dynamic items coming from a list of strings of variable size. The menu should show the first 5 items in the list and then a 'More...' item that would refresh the list of items showing the next 5.

I don't know if it's possible to do this up at the level of
ContributionItems, etc. FWIW the snippet below shows two approaches for
doing this in a plain SWT pop-up menu (a drop-down menu would be no
different). Its default behaviour updates the items when the More... item
is armed. If you change its UPDATE_ON_ARM variable to false then the items
will update when the More... item is selected, but this is not as smooth and
necessitates showing a new menu with the updated items.

Grant has a good example of implementing something like that using SWT.
But if you are in an RCP app and using ContributionItems, please don't
do that, the protocol doesn't support it (and in Eclipse 4 or Eclipse
SDK 4.x it won't work reliably/at all).

From a UX point of view, the menu is the wrong place to provide
pagination. List a few items (like you mention) and then the More...
menu item should open a small dialog. The pattern is used all over
eclipse: Show view.., Open perspective..., The "New" menu Other..., etc